tv Washington Journal Douglas Holtz- Eakin Discusses the Affordable Care Act CSPAN April 12, 2017 7:35pm-8:01pm EDT
great facilities is a very challenging one. announcer: that was a short portion of her remarks. see it in its entirety at 8:00 eastern here on c-span. announcer: on this morning's washington journal we took a look at some of the issues republicans face as they attempt to repeal and replace the affordable care act. continues. host: w host: we are joined by douglas holtz-eakin. stories about continued attempts by the republican party to pass the republican health care bill. what you think happened with the last attempt and what went wrong? guest: this was almost to be expected. if you look at the bill, it's a historically large undertaking. there are entitlement reforms in there with medicaid and the trillion dollars in tax cuts.
that's an enormous undertaking. if you look at the history of big reforms of any types, there are usually some bumps in the road. they're trying to stretch policy theerences range from freedom caucus to susan collins in the senate and that's hard to do/ . host: how do you satisfy those widespread concerns? guest: you can't simultaneously make everyone happy. there will be things in the bill that everyone will dislike. republicans are now governing for the first time in a while. their learning that governing is hard and you will take votes that you don't left. host: to satisfy the freedom caucus, they make concessions as to benefits and what can be covered. do you think that was a mistake and that we can attempts to satisfy these two parties? guest: you have to be in the room to be able to answer the question. if we did this to satisfy one party, are we losing votes over here? the goal is to get to 218 votes in thehouse and 51 votes
senate simultaneously. only those in the room know where the trade-offs are taking place. host: do you think the repeal and replace portion has to go forward or should it just a at repeal? guest: i don't think it should just a at repeal. i don't think that was an option. i think we heard from certain senators and congressmen that they were not going to simply repeal. beginningto see the of the replacement process and that's what's in the bill. host: when it came to the medicaid aspect, there was a lot of concern about how they can be how theand possibly money goes out to states. talk about the best way to treat medicaid and should it have been a consideration? guest: you have to be honest about the outlook for all of our entitlement programs. they all need some reforms. they are not performing as well as they should for a country as great as the united states. medicaid is going to be reformed at some point. the question is what will those reforms look like?
the idea of having a fixed amount of funding from the federal government to the state for each type of beneficiary medicaid is an old one. it's not a particular shocking development. it's a devil in the detail story about how much money, how fast does it go up over time. have properly been the focus of attention and they are still working in a. it out. host: douglas holtz-eakin joining us for this discussion. (202) 748-8001 for republicans. (202) 748-8000 for democrats. s, (202)pendent 748-8002. i will show you the headline from "u.s. today" as their turn to get the package ready. a forum sponsored by politico that talk about what they were looking for particularly when it came to changes in health care or at least legislative changes. i want to show you that get your response to it. [video clip] >> making sure that pre-existing
conditions continue to stay protected. making sure that health care is affordable, but the primary objective has been and will be and always will be lower insurance premiums. if we don't do that, then we will have failed. in doing that, the proposal that was out there was looking at allowing for a waiver for health benefits, allowing for a waiver for the majority of community ratings with the exception of gender, and allowing a waiver for guarantee issue. that would have to be in conjunction with the palmer's 's likert palmer's likert and harris a minute. makean invisible pool to sure that premiums do not go skyrocketing for those were sick. host: let's talk at couple of things that he brought up. pre-existing conditions and
making sure they are protected -- good idea? guest: absolutely. this is something that has plagued the insurance market for a long time. when we passed the hip a lot a while back, there was a possibility of that in the individual market. i think there's a broad consensus that it has to say. host: low premiums -- how do you make that happen? we continue to see in some cases premiums going up, some by double digits. had he put a cap on that -- how do you put a cap on that? guest: over the long-term, premiums are going to go up as fast as health care costs go up . insurance spreads around the health care bill and if they are growing, insurance cost will have to go up. in the near term , the concern was that the transition period between getting rid of the affordable care act and installing the new sub's cities that premiums have skyrocketed. they have placed $15 billion for
what they call an invisible risk sharing pool. mechanism essentially by which an insurance company will say you are going to be really expensive. your shopping like everyone else and you get the policy you want and your treated equally, but they are going to assign you to a pool. they will take your premium and put it in a pool and the federal government will supplement that money and help cover the cost of high-cost people. host: you mentioned the cbo report of 24 billion people. what you think of that estimate and what you think about the criticism by republicans? guest: i think it is fair to criticize the cbo on the merits of the estimate. i have some quibbles with the numbers. i don't think it's fair to question their credibility and institution. .hese are hard things to do just to give a flavor of how hard it is, the market health care act has $100 billion that goes to states for patient state stability funds where they have
tremendous options on what they will do with it. they can give it to individuals and cover out of pocket costs. they could give it to insurance companies. cbo has to sit and make a judgment about what a judgment about what estate will do in 2024 about money getting from the federal government. it matters a lot about what premiums will be. you can have a professional disagreement on the judgment they will make, but let's not pretend it's an easy judgment to make. host: our guest is the current president of the interconnection for -- american action forum. steve, you're on with douglas holtz-eakin. caller: thanks for taking my call. i just have a comment. i believe people in my position -- my wife and i are small business owners -- we have been forgotten. we talk about people possibly losing their coverage, but we lost our coverage not because we are unable to pay something. we can, but we can't pay the
amount that is being asked of us. the premiums are ridiculous. i hear a lot of talk about coverage, federal, state and local coverage, union coverage, but i don't hear a lot about people out on the street, which make up 65% of the workforce, which is small business, being looked at the given an opportunity to participate. we just can't participate because we can't afford what we are being asked to pay, which is $850 a month in a $13,000 deductible. that is my comment. guest: i think it's a good comment. there is employer-sponsored insurance with big companies. there's the individual market, which is the focus of the attention in the afford will care act, and then there is the small business market. that has had continual premium increases. it has been a problem. the only real strategy so far on both sides has been to potentially waive the impact of the affordable care act.
plans thatather old preceded the aca. the trump and attrition has done the same thing. that amounts to kick in the can down the road. host: from baltimore, maryland, gloria. caller: good morning and thank you for taking my call. one of the things i want to say is maybe if we educate the public on how health insurance works, maybe we won't have as many problems as we do. here in theple united states, they really don't know how health insurance works. maybe that's one of the first things we need to do is educate the public. second of all, i just can't believe this bill that they put together so fast. it is worse than what they have in place now. that is my comment. i just hope that we can do something a little bit better than what we are doing now
because we are not making it. third world countries have insurance and we hear, as the biggest leader of the free world , we don't have health insurance coverage for people here in this country, which i think is an abomination. i thank you for taking my call. guest: i really agree on the issue of public education both for health insurance but for health care more generally. it has begun, i believe, and enormous cultural shift where people understand they have some responsibly for making health care choices and that there is money involved. they might want to ask the question of how much does this cost and is there a cheaper way to do it? for decades, our physicians were trained to ignore costs. money shouldn't matter. don't let it influence your decision speed is not shocking we ended up where we ended up . it has been a mistaken impression of people that this was somehow hastily
slapped together. this was essentially 15 months of work on the republican side. there were a replacement bills offered up and they selected one by tom price that had freedom caucus cosponsors as the base bill. they talked a lot with members on how to put this together. this was a long process. they got to the final product. third on the coverage, here's the tough question. this is one people have to think about. cbo estimates next year that if , 6 bill were enacted, 2018 million individuals would choose to not buy individual insurance and 5 million individuals would choose not to participate in a free medicaid program. all that will change between now and then is that it will no longer be illegal to be uninsured. they get rid of the mente. those people have voluntarily chosen to be uninsured. we will presume that is best for them. do we want to respect that decision or bemoan the fact that 11 million people are
uninsured? that's what goes on the bill and that is something that people have to decide with if they are comfortable or not. host: sam on independent line. caller: good morning and thank you for taking my call. i have a lot of thoughts on health care, but i will keep it to one particular thing, which is the medical loss, also known as the expense ratio. i'm just a nerdy engineer, but i wanted to figure out an arm myself with data. i studied some of the annual report filed by large insurance companies. ifasn't aware and correct me i'm wrong, but for every dollar in premiums that in insurer takes in, they need to pay out .etween 80 to $.85 in claims is that the case? when i hear people say that insurance companies are making huge amounts of profit, the data
doesn't support that. 15 or $.20 left everythingcompany needs to be squeezed out of that 15 to 20%. that leaves a net profit of maybe three to 5% for these large insurance companies. if that is a fact and the annual reports support that, then i'm wondering why is it that --urance companies are [inaudible] guest: he did all of his homework is likely right. for every dollar of premiums, you have to pay out 80 to $.85 in covered medical costs of the beneficiaries. that leaves the company with what is left and the profit rates are not exorbitantly high, but it is easy to beat up on insurance companies.
both parties do it on a regular basis, but the facts are what he says. this is something that came in with the aca. this came in at the state level. the only concern that most people have about that is how do you classify a medical cost? if we get a new piece of software on an app that can get you to a lower cost, is that a medical cost that we should account for that or is that overhead for running the company? there's a bunch of tough judgment calls, but it's exactly how discredited. host: "the new york times" saying the trumpet ministration want to would be pay subsidies to insurance copies under the afford will care act, but the house says it's illegal. when you think about the move to continue on with these subsidies? guest: these cover out-of-pocket costs. i think they are an integral part of the aca. if you want to keep the -- they areerating
not vibrant and they are some melting down in some places. if you want to keep them at all functional in the future, you have to give them money one way or the other. the trump administration is continuing what the obama administration did. it is the house republicans believe that they do not have the authority to pay this money and that they need to ask congress for an appropriation. that had ever happened. they had one ruling in that case in favor of the congress. the trump administration can appeal that ruling and continue to pay the money. in some weird way, the republicans will be suing each other. we have ended up in strange places. host: fredericksburg, virginia, l, you're talking with douglas holtz-eakin. caller: my biggest problem in this nation is the illegal immigrants. they come to the hospital. hospitalme out of the and the young lady i knew who was manning the emergency room
desk, where have to pay $500 each time i walk into an emergency room to meet my deductible of $22,000 for the lady, she said just in front of you was a mexican and she didn't pay anything. last month she came in and got a free baby. we have in my opinion 80 million illegal immigrants in our nation, who every single one of them, i'm flipping the bill for them. until the united states of america comes to grips with what is truly going on, and they know , and it's always in my ignorance hidden, we are going to take this in the knee. oh $80 million to mexico yo a year and trade deficits. since they are there people and they own them and they own mexico, why not go to them and say this is the amount of money you have paid out of our pockets and tax dollars to take care of your people who are here illegally and we are going to deduct that from the amount of
money that we owe you? host: we will let our guest respond. guest: i see no estimates that there are 80 million illegal immigrants. the highest numbers look like 11 or 12 million. the second question i have is why the gentleman would be going to the emergency room for regular or ordinary care. that is one of the criticisms of medicaid where tw to many people are ending up in the er for ordinary care. that's an extensive location to do that. third, there is the reality that the united states has a commitment to providing people with care. no hospital can deny an individual who needs care from that care if they walk into the hospital. that's a ruling of the spring court. -- the supreme court. whether they are an illegal immigrant work otherwise, there will be some uncompensated care that the hospital wit will
face. host: there's an argument on the other side that says why not fix what is currently wrong with that? which approach is better? is it easier to approach to fix what currently is wrong? guest: i've never been able to participate effectively in this rhetorical debate. are we going to repeal and replace or going to fix? you can have the aca and then we have independent advisory board. you can pass a law that got rid of the independent advisory board and thus fix the aca or you could pass a law that repealed the aca and put a replacement plan that had everything in aca except having an independent advisory board. i don't know what that means. for me, the only question is what is the outcome? what is our health care sector look like at the end of the legislative process? i don't think we want to stop the aca. i thought it was the first and what was a series of reform to our health care sector, which was needed. i was wrong about the politics that became deeply partisan and
ground to a halt for a very long time. it was undesirable from a policy perspective. we are beginning against it when we get to the end of whatever legislation passes this year, i hope we will have an improved health care sector. host: we hear claims from the president himself about the current system collapsing. we see insurance companies moving out of certain markets. you think a collapse is going to happen? guest: i think it is a fair concern. there are five whole states where there is only one insurer. at, we will go back to medical loss ratios and some of those counties and they are over 100%. they are paying out more in claims that they are taking premiums. they are not going to stay. i think it's a fair concern. host: let's go to our democrats line in blackwood, new jersey. kevin, go ahead. caller: i see both sides of the equation. we spend more than any other
nation on health care and we rank among the poorest when you look at the major health indices. problems,s a lot of but it's just baffling why they can't fix those things. there are some new things that we need to fix, even just to get to basic health care that the rest of the world, especially the industrialized world has. guest: he makes a net: point. if you roll -- he makes an excellent point. if you roll back the clock, there were two big problems. not enough access to a portal insurance -- affordable insurance. number two we spend so much money and we get relatively poor outcomes. it's a very inefficient and low value system. the aca was very heavy coverage on expansions.
changingry late on delivery systems to deliver higher value could that should b. that should be the focus. we have to get insurance premiums down and control costs. there's still a lot of work to be done on that. host: from michigan, this is paul for our guest on her independent line. you are on. paul from michigan? in columbus,ert georgia, republican line. caller: good morning. how are y'all doing? since your guest cannot answer the question about what the guy was asking about the illegal aliens, i was just wondering if he could answer this question. why can't we just have these savings accounts were people put money and savings accounts for health insurance or life insurance and whatever and still have an insurance company as a middleman to do that and pay money out to them?
if the illegal aliens campaign to the desk can pay into their life savings accounts or medical savings accounts, then they will be taken care of. they can take care of themselves and we won't have to take care of them. it would be tax-deductible or whatever. the way the government wants it to be. it seems like the government cannot take care of social security. they cannot take care of .edicare and medicaid let the people take care of their own medical problems and their own life insurance problems because if you have these life insurance and medical andrance savings accounts you get rewarded for them, then that would give you an incentive , even the illegals, an incentive to pay for their own. guest: there are lots of ways to
insure and one of those is to self-insure in case something financially bad happens to you that you have money to pay for it. you make an health care act of placement bill much more extensively uses health savings can put into which you money and use it as your premium to pay for health insurance premiums. that is a good element from the point of view of making people aware of the cost of their care and giving incentives to save against certain instances. those accounts are not going to be available to those who are not here legally. the u.s. provides tax benefits to its citizens and not people have broken the law to get here. it's not a solution to illegal immigration. host: couple of other quick matters -- tax reform. do you have to see health care first before tax reform and you think is going to happen? guest: you have to give the health care bill passed before tax reform. there are trillions of dollars of affordable care act tax reforms and that bill.
it's a fair reading of the political landscape that if they don't do this in health care and try to do tax reform, the medical device people will show up and say you have to get rid of the medical device tax. others will show up and say why them and not me? you'll have trillions more tax cuts to begin with. makeill need something to it at up and it might get too hard. the idea of doing the health-care bill first is important to get the tax reform bill done. tax reform is very hard. we have not seen in 30 years for a reason. it in 2017 only if the president of the united states commits extensively to a plan and says this is what i want. it will be good for the mac and no class and this is why he goes into get it done. in the absence of that, the historical record says it doesn't happen. host: what you think are good rings to have in those reforms? lower rates,nt to broaden the base, and get the
tax system out of dictating what businesses and people do. at this point in time, our al problem as a nation is slow growth. we should support innovationinvd acquisition of skills is the focus. the other thing we know we have a big problem with his international competitors. losing headquarters. our tax code was fantastic for 1950, doesn't look so hot in 2017. i think those are the key pieces. to get some thing that is a permanent change that is announcer: tonight on c-span a look at the history of education. president trump holds a news briefing at the white house with nato secretary-general. secretary of state rex tillerson meet with russia's foreign minister. and the un security council considers a